Stocks crumble as global growth, US earnings fears spook markets

SYDNEY (Reuters) – Asian shares dived on Thursday as hundreds of billions of dollars haemorrhaged from global markets after a rout in tech stocks inflicted the largest daily decline on Wall Street since 2011, wiping out all its gains for the year.

The dive in formerly high-flying US tech stocks sent investors scampering to the safety of sovereign bonds, with yields in 10-year Treasuries US10YT=RR falling the most since May to 3.11 percent.

“Weak US housing data, mixed corporate earnings results, trade war fears and concerns regarding a slowing global economy all contributed to the sell off,” Sydney-based Rivkin Securities said in a note to clients.

“Investor sentiment remains cautious as we anticipate the reports of over 100 S&P 500 companies including Amazon , Alphabet and Comcast .”

Weak readings on manufacturing in Europe added to angst over world growth, as did a surprise slump in US home sales, which suggested rising mortgage rates were sapping demand for housing.

The growing international pressure on Saudi Arabia over the death of journalist Jamal Khashoggi also weighed on investor sentiment.

On Wall Street, disappointing forecasts from chipmakers hammered the tech sector. They followed weaker-than-expected forecasts on Tuesday from industrial giants Caterpillar and 3M .

The Nasdaq closed down 12.4 percent from its Aug. 29 record closing high, falling 4.4 percent for the day in its biggest one-day percentage decline since Aug. 18, 2011.

According to data analysed by Reuters, the proportion of stocks, regions and sectors that are technically in a bear market has shot up since the start of January, prompting some analysts to conclude the bull run may already be over.

Citi has lowered its global growth forecast for both 2019 and 2020 by 0.1 percentage point each to 3.2 percent and 3 percent, respectively, it said in a note Thursday, citing policy tightening by the US Federal Reserve.